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Important R&D Tax Associate Entity Payment Rule Considerations Approaching End of the Financial Year

June 1st, 2023

The R&D Tax Incentive includes a related party integrity provision whereby if a company incurs R&D expenditure to an associate, it must pay that amount in the same year to claim a notional deduction for that amount in that year (provided all other eligibility requirements for the R&D tax incentive are met). Associates are those entities that, by reason of family or business connections, might appropriately be regarded as being associates of the R&D entity, and relevant examples of the […]

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Should policy makers be considering an increase to the $20 million turnover threshold re: eligibility for the Refundable R&D Tax offset?

May 26th, 2023

A company’s rate of R&D tax offset and whether it is refundable or not depends primarily on the R&D entity’s aggregated turnover: If an entity’s aggregated turnover is less than $20 million and it is not controlled by any exempt entities, then the company can claim the refundable tax offset. The refundable tax offset rate is equal to the company’s corporate tax rate plus an additional premium rate of 18.5%. If an entity’s aggregated turnover is $20 million or more, […]

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Deadline Approaching for lodgement of Overseas Findings for R&D Activity first conducted in FY23

May 18th, 2023

Companies seeking to claim expenditure for overseas activity incurred by an Australian company under the R&D Tax Incentive must apply separately to claim these costs by lodging an Overseas Finding Application with AusIndustry. In addition to general eligibility criteria, there are specific and extensive rules to determine whether expenditure on overseas activities is eligible under the R&D Tax Incentive. Generally, R&D activities conducted overseas can only be eligible for the R&D Tax Incentive where: The activity to be conducted overseas has a […]

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New AAT Case (LAKES OIL) finds Hydraulic Fracturing Activities NOT eligible under the R&D Tax Incentive

May 8th, 2023

A recent AAT Decision dated 26 April 2023 (LAKES OIL NL and INNOVATION AND SCIENCE AUSTRALIA (Taxation) ) has found a company’s registered activities were not eligible under the R&D Tax Incentive. The project under scrutiny in the case is entitled “Project 1 – LAK2006 ‘Hydraulic Fracturing Technology for Gippsland Tight Gas’”. The dispute was focused on a registration in the FY14 and FY15 period. During the case INNOVATION AND SCIENCE AUSTRALIA contended that: the activities undertaken were not experimental […]

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